“It’s hard. I am struggling.”
That’s how Amanda Clayton justified her use of taxpayer-funded benefits – after winning $1 million in the Michigan lottery.
Until last Wednesday, Clayton was still collecting state benefits after winning big on the Michigan Lottery’s “Make Me Rich!” television show. Clayton, who is a single mom of two, continued to rely on taxpayer assistance in the form of food stamps even after buying a new home and a new car with her winnings.
She’s now off the program, according to The Detroit News. Her situation, however, has prompted legislators in the state to consider legislation that would ban lottery winners from accepting taxpayer-funded benefits.
Rep. Dale Zorn ( R) introduced the legislation months before Clayton’s case made news, saying:
State assistance, our tax dollars, is meant to go to those who are truly in need. It’s not meant to go to those who won big in the lottery.
Similar cases have surfaced across the country, not just in Michigan.
How does it happen? Many states have an income-based threshold for assistance. To the extent that lottery winnings aren’t considered income (though for federal tax purposes, lottery winnings are considered income), there’s no law that would prohibit Clayton and others like her from receiving taxpayer-funded assistance such as food stamps. Some states have moved to an income and asset-based means-testing system; Michigan made the switch last year and Pennsylvania followed suit this year. Currently, there’s no federal law that would ban lottery winners from benefiting from food and other assistance. However, Sen. Debbie Stabenow (D-MI) and chairwoman of the Senate Agriculture, Nutrition and Forestry Committee, hopes to see that change.
Such a move towards income and asset testing has been considered controversial because of the real fear that it might cut services off for those genuinely in need. But what constitutes “in need” depends on who you ask. Despite pocketing nearly half a million dollars after taxes, Clayton feels that she’s still deserving of public benefits, telling WDIV:
I thought that they would cut me off, but since they didn’t I thought maybe it was OK because I’m not working. I feel that it’s OK because I have no income, and I have bills to pay. I have two houses.
My guess is that Clayton may be back on the public rolls sooner than we think. Instead of relying on taxpayer assistance while she funded her buying spree, perhaps she would have been wise to heed the words of former President Ronald Reagan who said, “Welfare’s purpose should be to eliminate, as far as possible, the need for its own existence.”
